NGOs and the Law

Switzerland: New Accounting Rules for Not-for-Profit Organizations (NPOs)

The International Journal
of Not-for-Profit Law

Volume 3, Issue 3, March 2001

The Swiss Foundation for Accounting and Reporting Recommendations (Fachkommission fuer Emfehlungen zur Rechnungslegung or FER in German) has been developing recommendations for accounting standards for NPOs in Switzerland since 1997. In recent months the FER has posted the proposed standards online (in both French and German), proposed topics for discussion, and held public hearings in Geneva and Lucerne. The proposal on NPOs can be accessed at, and the site also includes information (although not the proposed standards themselves) in Italian, Romansch, and English.

The standards on NPOs are the 21st of the standards being promulgated, and thus are called FER 21 in German. A working group to develop FER 21 was established, and it included input from a variety of experts and practitioners. The issues raised include the following:

  1. how to differentiate between for-profit and not-for-profit organizations with respect to the ways in which the accounting standards should apply – taking into account the fact that NPOs are independent organizations, with public benefit purposes, and that the financing of such organizations comes from gifts and grants (thus the NPOs dealt with by FER 21 do not include most professional associations, etc.);
  2. how to differentiate between large and small organizations, with the latter not being required to use accrual accounting – the proposed cut-off is 2 million Swiss franks;
  3. determining the role of trial balances for NPOs.

A full list of the questions for discussion is available in French and German on the website.

ICNL will be following the development of the NPO accounting standards in Switzerland now that that hearing period has ended. The development of special rules of accounting for NPOs is an important part of NPO self-regulation. Once standards are set, NPOs can report their accounts accordingly, and using uniform standards. Such reporting allows donors, both public and private, to look carefully at the books or proposed donees and determine whether they are organizations to which they wish to make gifts or grants.